I HAVEN’T BEEN feeling myself lately. Until now, I didn’t understand what had brought this on. You see, I have this different attitude toward money—and it’s changed the way I behave.
Before, it seemed like money was always on my mind. I used to love to read Barron’s every week. Now, I just pick it up in front of my house and toss it in the garage, where it joins 20 other unread copies. I also rarely check my retirement portfolio. I couldn’t tell you how much money I have. I can’t remember the last time I looked. I used to look four or five times a week.
This indifference has nothing to do with not caring about the financial news or my portfolio’s performance. It has to do with my new feeling about money. I know what has caused this not thinking about money. It’s Carl, my financial advisor, whom I hired about a year ago. Ever since he started showing me charts about my money, it’s dawned on me what great shape I’m in financially.
There’s no need to think about my money because, according to Carl, I’m not going to run out. I have enough to live a comfortable life based on my spending goals. You know what? I believe Carl. For the first time in my life, I realize I’m financially secure.
With this new mindset, everything in life seems so much better. The food at restaurants tastes better, the hotel beds are more comfortable and my vacations are more enjoyable.
Why? Because financial security buys peace of mind. It allows you to live a life without worrying about money. It gives you a sense of calmness. When I’m experiencing the finer things in life, I no longer worry about how much they’re costing me. When I have dinner at a nice restaurant, I have a new sense of appreciation for the food and wine.
Unfortunately, many retirees aren’t spending as much as they could. They don’t have peace of mind. They’re not enjoying retirement as much as they should. Liz Miller, president of Summit Place Financial Advisors, told a Bloomberg reporter that, “I am surprised how often I sit with a retired couple and have to encourage them to spend more.”
The Employee Benefit Research Institute released a research paper in 2018 that found that many retirees were slow to spend down their money. The study’s author, Sudipto Banerjee, wrote that, “In fact, those with the highest level of assets show the lowest rates of spending down.”
It seems many retirees are thinking and worrying too much about their money, even when they don’t have to. My advice: Hire a fee-only financial advisor, so you feel more confident about your spending. It helped me—and I’m now enjoying retirement far more.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Getting Schooled, Battling Time and Don’t Want to Know. Follow Dennis on Twitter @DMFrie.
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Guilty as charged. If I had an advisor he would tell me to spend more, but it ain’t gonna happen. I have a pension and in the ten years I have been retired I have yet to spend any of my retirement savings. The RMDs are reinvested. I can’t say I stress over money but I’m constantly thinking about spending and what if’s. What if my wife is on her own and her income is cut in half, what if one of us needs LTC (even though we have some insurance), what if one of my kids needs help? What if there is a major stock market correction?
Don’t get me wrong, we don’t live like hermits, we travel, we buy stuff. But I see no need to spend money just for the sake of spending.
While basic Financial Independence (FI) is comforting, I am aligned with Richard in that I’ll never stop worrying about FI as no one can predict the future on either the revenue side (markets, inflation, interest rates, taxes) or expense side (kids, long term care). Meanwhile, most of we boomers have lived pretty well in our life’s journeys, and our kids will appreciate us even more if we happen to undershoot spending a bit.
Giving to charities may also increase “peace of mind” and a sense of purpose.
My mother-in-law is 92 and lately has become fearful of outliving her money. She has at least $250K in assets, of which $150K is in a brokerage account. Oddly, she has concerns she either won’t be able leave us any $ or conversely, that we are anxious to be kept in her will and inherit money (we are not, we have enough).
I appreciate how responsible she’s being but honestly, she will probably keel over without going to a nursing home and it’s just wasted anxiety. I don’t know how to stop her from doing this, and telling her she could collect a VA pension of $1500 a month if she spends down her assets didn’t make her feel better.